With 12 U.S. listed IPOs scheduled to price this week, it will be the most active week not only of 2011, but since 2007. While the anticipated pricings later this week of Zynga Inc. (ZYNG) and Michael Kors Holdings (KORS) catching all the headlines, the first to come out this week Jive Software, Inc. (JIVE) opened up 26% at $15.12 Tuesday morning on the Nasdaq.
Jive Software, Inc. priced their upsized 13.4M million share IPO at $12.00, above the indicated range of $8.00-10.00. The company says it plans to use the proceeds for general corporate purposes, including working capital and potential acquisitions. Based on the $12.00 pricing, the company will have a market capitalization of approximately $688 million. JIVE is backed by Sequoia Capital and Kleiner Perkins. Both are not selling on the offering, and will own approx 29.2% and 11.47% post offering. Morgan Stanley and Goldman Sachs are leading the offering.
Jive provides a social business platform that enables collaboration both inside and outside the enterprise. Their platform operates both within the public and private cloud enabling a collaborative workspace within the enterprise, while also leveraging the social web to improve customer communication outside the enterprise. With over 650 blue chip customers they are the leader in the very early stages of social business software adoption.
The company has experienced rapid revenue growth with a 66% CAGR from 2008 to 2010 (from $16.9M to $46.3M), and year to date for 2011 revenue is up 73% year over year. This is only a small portion, however, of what they view as an approximate $26B billion overall market opportunity (combining the collaboration market, content application, information access software, and CRM). The company is currently not profitable and does not appear to be reaching profitability for at least another couple of years as they are currently investing heavily in growth through product development, sales and data center.
The lack of profitability has not deterred investors clambering to get a piece of the offering. Based on heavy demand, the scheduled pricing was moved up a day and books closed last Friday, Dec. 9. Investors have seen what social has done outside the enterprise with the likes of such companies as Facebook, LinkedIn (LNKD) and even Zynga (scheduled to IPO Thursday this week), and JIVE may be viewed as an early stage platform to invest in a new category of social for the enterprise. There is also another force giving credence to the offering and that is the apparent current appetite for cloud based companies in the market. Recent acquisitions of SuccessFactors (SFSF) by SAP and RightNow Technologies (RNOW) by Oracle (ORCL) only add fuel to the fire. Whichever the reason, or possibly due to both, Jive is up early in their first day of trading.
Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in JIVE over the next 72 hours.